How Can Performance Management Software Improve the Overall Output of a Logistics Company?

The operational efficiency of logistics companies relies on many moving parts working in harmony to achieve increasingly demanding goals. Performance management software helps you monitor, evaluate, and improve the output of your most valuable asset — your employees — to maintain optimal performance, champion growth, and secure retention.

It can also offer critical insights into your operational processes, illuminating areas for improvement.

But we’re getting ahead of ourselves. In this article, we’ll discuss the benefits of performance management and walk you through how to implement performance management software into your work routine.

Why performance management is important in logistics

Logistics is an industry that’s significantly affected by technological advancements, fluctuating market conditions, and increasing customer expectations. The demand for globalisation, speed, and accuracy has forced logistics to push their operations — and their workforce — to the limit. 

This is perhaps why the logistics sector is expected to experience worker shortages of around 400,000 people by 2026 as less than one in four people consider pursuing careers in this area. As companies strive to tackle the above challenges to avoid operational disruptions, it can inadvertently put a serious strain on employee performance, engagement, and productivity.

Performance management seeks to monitor employee performance levels in alignment with organizational goals. Not only does it track performance in relation to key performance indicators (KPIs), but it also aims to improve employee output through continuous goal-setting, constructive feedback, coaching, training, and recognition. 

This can bring about a range of benefits that accelerate the overall output of operations.

Key benefits of using performance management software 

Traditionally, performance management involved accumulating historical performance data and reviewing the findings with employees in annual or bi-annual appraisals. This method not only left critical issues unchecked for months, but it restricted employee growth, engagement, and job satisfaction.

The modern approach to performance management leverages performance management software (PMS) — a centralised platform that collects performance data in real-time. It enables continuous performance tracking, regular feedback, collaborative goal-setting, and accelerated growth. 

Let’s take a look at some of the key benefits of using performance management software.

Real-time visibility into employee performance

Performance management software gives employers and employees access to a centralised platform that can be used to track performance progress in real-time.

Along with establishing goals and responsibilities, managers, HR, and logistics employees can use the software to analyse post-project performance, provide and receive feedback, and monitor performance in alignment with targets. It can be easily integrated with other key tools, such as supply chain management software and logistics ERP, to offer deeper performance insights and give more context to appraisals. 

Not only does this help employers monitor whether employees are meeting performance expectations, but it keeps employees on track too. From one intuitive platform that can be accessed from any device, employees can self-service access performance reviews, feedback, and progress.

Data-driven workforce decisions

With intuitive dashboards, in-depth reporting, and a range of other features that streamline core people management processes, HR performance management software can enrich decision-making. Access to data helps you spot critical, inconspicuous workflow issues and prevent bias from arising in your workplace, leading to more objective, data-driven decisions. 

HR performance management software delivers instant visibility into workforce performance. With intuitive dashboards and in-depth reports, you can analyse operational metrics across procurement, warehousing, and fulfilment along with individual employee KPIs, such as attendance, absences, and daily performance. 

Companies can make data-backed decisions about scheduling, resource allocation, professional development, and operational initiatives.

Streamlined communication and collaboration 

Effective logistics relies upon tight coordination and collaboration to make sure that the supply chain runs smoothly from procurement to delivery. When workflows are siloed and stakeholders aren’t on the same page, miscommunication and misunderstandings arise, paving the way for delays and disruptions. 

Performance management software helps you create a more transparent environment. It centralises communications to give distributed teams immediate access to knowledge, from performance indicators to project progress and feedback. And, it provides employees with a platform to collaborate with colleagues and managers to meet aligned goals.

Improved employee engagement and productivity

Constructive feedback and recognition drive employee engagement and productivity — two key ingredients of a thriving logistics workforce. In a study by Gallup, 80% of employees said that they were fully engaged in their role as a direct result of recently receiving feedback. 

That said, employees can spot impersonal feedback from a mile away. To engage employees, managers need to deliver personalised, meaningful feedback, drawing insights from individualised data.

With access to real-time employee performance data, managers can provide prompt, data-backed feedback in response to real-time actions as well as during weekly, monthly, and annual performance reviews. They can work with employees to collaboratively develop actionable goals and keep employees on track to achieve them. 

And don’t forget employee recognition. Performance management software doesn’t just illuminate areas for improvement — it spotlights when employees go above and beyond. Celebrating your employees’ achievements fosters a culture of recognition, demonstrating that you appreciate and value your workforce’s contributions. 

A workforce that feels supported and recognised is more engaged and productive, accelerating your outputs.

Enhanced employee retention 

The average employee turnover is at 3.6% And yet, it’s as high as 37% in the warehouse sector. From this data, it’s clear that logistics companies need to do more to create a positive work environment that nurtures and supports its employees.

One way to do this is by using performance management software to facilitate a culture of feedback and action. By scheduling regular one-to-ones and encouraging two-way feedback between managers and employees, managers can identify festering issues and resolve them before they lead to resignations. 

Ultimately, performance management software plays a key role in fostering an environment that values growth, feedback, communication, and recognition. These are all factors that increase job satisfaction and retention. 

How to implement performance management software 

Before integrating performance management software into your logistics company, you should create a strategic plan to help the process run smoothly and maximise long-term value. Here are three key steps to follow.

Define clear objectives

What are you hoping to achieve by implementing performance management software? Conduct an evaluation of your business’s current processes and performance levels to identify areas for improvement. Use data from reports, existing databases, employee feedback, interviews, and more to gain a comprehensive idea of where gaps, inefficiencies, and other issues exist.

From there, you can begin to define clear objectives for performing management software implementation. For example, you might aim to:

• Improve employee engagement and productivity.
• Close skill and knowledge gaps.
• Boost learning and development with tailored employee development plans.
• Streamline communication and collaboration.
• Increase employee retention.
• Drive operational process improvements.

With your objectives established, identify the KPIs you’ll need to track to measure whether you’re meeting your goals. If your objective is to enhance employee engagement, for instance, conduct employee engagement surveys and track net promoter scores, absenteeism rates, and productivity metrics.

Provide training

To get the most value out of your performance management software, employees and managers need to know how to use it effectively. While you should aim to integrate a solution that’s inherently intuitive and user-friendly, you still need to provide training to get everyone on board and accelerate time-to-value.

Provide training to onboard users onto the new software. Tailor training for employees and managers to help them navigate and use the features and functionalities they’ll need. 

Also bear in mind that if you haven’t already established a culture of feedback, it can be difficult for employees to adjust. Train managers on how to conduct fair performance assessments, give constructive feedback, recognise achievements, and support employee growth. 

For employees, it’s important to help them understand the value of constructive feedback and how to use it to guide their development. Communicate the benefits to align employees with your vision and cultivate a readiness to learn.

Regularly monitor and adjust

Performance management is an ongoing process that requires regular monitoring, evaluation, and adjustments. You want to be sure that your initiatives are meeting objectives and that there are no hidden obstacles negatively impacting performance.

To do this, conduct scheduled reviews of your performance management strategy. This could be quarterly, twice a year, or annually depending on the complexity of your business and how fast things change. Use performance reports, employee feedback, and surveys to get an accurate, data-informed idea of where your strategy is thriving as well as any areas for improvement. 

Now it’s time to adjust your strategy based on your findings. For example, if you’ve noticed a recurring complaint or suggestion being made in your employee feedback surveys, make it a priority to address the issue with targeted improvements. 

Final thoughts

Effective performance management software is instrumental in helping logistics companies increase their overall output. Its features and functionalities unlock real-time performance visibility and centralised communication that can be used to pinpoint and resolve operational inefficiencies and performance obstacles. 

And, by integrating feedback, recognition, and development into your workplace culture, these powerful tools empower employee engagement, productivity, and growth.

Effective supply chain management requires an organised, well managed logistics operation to ensure parts, products and services move from suppliers through the supply chain to the end user on time and in good condition. The aim of a logistics operation is to provide better efficiency, reduce operation costs and promote service quality. Call 0800 1422 522 to find out how IoSCM can help you improve your logistics operations.